From Oil to Fish to the Internet: Zapata Tries Another Incarnation

By LISA NAPOLI

Published: May 18, 1998

Alice Bradley sits at a desk in the very office in midtown Manhattan from which she was laid off months ago, back at her job as the editor of the on-line sports magazine Charged. When the publication, and its culture-watching sister, Word, were shut down by the owner, Icon CMT, in March, hopes were slim for finding a buyer to revive the Webzines.

''I didn't ever think I'd come here again,'' Ms. Bradley said.

That was before an unlikely white knight emerged: the Houston-based Zapata Corporation. Avram Glazer, Zapata's 37-year-old president and chief executive, announced late last month that the company would not only acquire the two popular but unprofitable magazines, but redirect Zapata's entire focus to matters Internet.

To boot, he said, Zapata -- founded as an oil business in 1953 by a young George Bush, retooled in 1994 as a food processing business under Mr. Glazer -- planned to change its name to the more digitally hip Zap.

The company will become a major player in the Internet and electronic commerce, Mr. Glazer predicted in an interview. ''We want to have a global network of sites,'' he said.

To find the pieces of that network, Mr. Glazer is conducting a national talent search. Last week, he began running advertisements in newspapers, including The Wall Street Journal and The New York Times, proclaiming, ''Zapata Will Buy Your Web Site.'' His E-mail address and phone number are listed in the ads, which have generated a ''tremendous response,'' he said, declining to elaborate further.

It might all sound like cyberhype, were Zapata not an established company with reported profits of $6.5 million on revenue of $30 million in the quarter that ended March 31 and a stock that has been trading in the $11 range lately after languishing below $5 most of last year.

Still, Mr. Glazer has disclosed little detail about how he intends to achieve his E-commerce goal. Nor would he comment on a more recent announcement that Zapata had secured three addresses on the World Wide Web -- instantwinner.com, internetnames.com, and betaworld.com. ''Their names sort of speak for themselves,'' he said vaguely.

He did say that he planned to transform Zapata's corporate Web site into a ''gateway to all our sites.''

''At the end of the day, what we want is a network,'' he said.

Internet industry analysts are confounded by the company's interest in the notoriously unprofitable Internet content business.

''I think they have more money than sense,'' said Regina Joseph, senior analyst at Jupiter Communications, a new-media research firm in New York. ''So many people have invested so much money, and gotten badly burned. How can they jump into the fray? I seriously question their due diligence and their intent.''

But Mr. Glazer comes from a family that has often dared to enter new territory. Through a patchwork of investments, his father, Malcolm, 69, amassed a fortune estimated by Forbes magazine at $300 million.

Starting more than 40 years ago as a watch salesman in Rochester, the elder Mr. Glazer parlayed his profits into diverse holdings that include real estate, a local television station in Laredo, Tex., nursing homes, junk bonds, restaurant chains, fish processing and professional football. He controls most of those holdings through his privately held First Allied Corporation.

''Going in a new direction is something a lot of people won't or can't do,'' said the younger Mr. Glazer, who since earning a law degree from American University in 1985 has managed his father's investments, including a controlling stake in Zapata acquired in 1993. Two of his brothers, Bryan and Edward, sit on the Zapata board, as does his father, while two other brothers and his sister are active in other parts of the Glazer empire.

The publicity-shy family had drawn scant attention before 1995. But that year, the Glazers' purchase of the Tampa Bay Buccaneers, the National Football League team, for $192 million (a league record at the time), thrust them into the glare of the news media. As newcomers to the sporting world, they provided endless fodder for Tampa Bay-area journalists, who chastised the Glazers for renaming the stadium after the Houlihan's Restaurant Group (whose stock they controlled), even though there was no Houlihan's restaurant in the area.

It is not the only time the Glazers have drawn criticism for their links to Houlihan's, which they now have a contract to sell to the Scoggin Group, a restaurant holding company. In October 1996, the family's plan for Zapata to acquire Houlihan's was abandoned after Zapata shareholders sued to block the deal -- which would have paid Malcolm Glazer $29 million in cash for his 73 percent stake in the restaurant group.

An earlier transaction, in which Zapata bought stock in another company controlled by Malcolm Glazer, Envirodyne, is the subject of pending litigation.

''To me it's a ridiculous lawsuit,'' Mr. Glazer said of the Envirodyne dispute. ''We bought the stock at $4.50 and now it's trading at $8. Most of these lawsuits filed are just nuisances.'' (Envirodyne's shares, which traded above $8 earlier this month, closed at $6.75 on Friday.)

The Glazers ''have been absolutely maligned and tarred and vilified,'' said Joe Von Rosenberg, a former director of Zapata and now the president of its Omega Protein unit, a fish-protein processor, which raised $130 million for Zapata in an initial public offering of stock in April. ''But they have an uncanny ability to pick investments that do well,'' he said. ''They look at a set of numbers and see things people don't see.''

Yet even a Zapata fan, Tim Ramey, an analyst at Deutsche Morgan Grenfell, which was an underwriter of the Omega Protein offering, is reserving judgment on Avram Glazer's current plan. ''Who knows if the Internet strategy can work or not?'' Mr. Ramey asked.

One apparent winner from the acquisition of Word and Charged is the previous owner, Icon CMT, which had operated the two publications as loss leaders for Icon's Internet hardware and technology businesses. In exchange for the on-line magazines, Icon received a promise of $2 million in business from Zapata.

''People forget that the Internet is tiny as a medium,'' said Scott Baxter, Icon's president. ''But in five years, it's going to be a completely different story. They understand that it's a growing market.''

But Ms. Joseph, the new-media analyst, predicted that Zapata stockholders might not be so patient. ''If, after a period of time, Word and Charged are drains, Zapata will come to the same conclusion as Icon,'' she said. ''It's a stay of execution for them, but only a temporary one.''

Still, Mr. Glazer plans to give the two Webzines resources that Icon did not -- including an advertising sales staff. And he offered jobs to all 12 employees whom Icon had dismissed, including Word's editor, Marisa Bowe, and Ms. Bradley, who is busy preparing for the re-introduction of Charged.

''He's told us to do whatever it takes to create the best publication possible,'' Ms. Bradley said of Mr. Glazer.

''He has yet to say, 'That's too much,' '' she said of spending.

Photo: Avram Glazer, Zapata's 37-year-old chief executive, plans to make a pair of World Wide Web magazines the seeds of an on-line empire. (Michael J. Okoniewski for The New York Times)